II 

118TH CONGRESS 

2D SESSION S. 5234 

To amend the Internal Revenue Code of 1986 to impose an excise tax 

on certain investments of private colleges and universities. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 25, 2024 

Mr. RICKETTS (for himself, Mr. COTTON, and Mrs. FISCHER) introduced the 

following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to impose 

an excise tax on certain investments of private colleges 

and universities. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Protecting Endow5 ments from Our Adversaries Act’’. 

6 SEC. 2. EXCISE TAX ON CERTAIN INVESTMENTS OF PRI7 VATE COLLEGES AND UNIVERSITIES. 

8 (a) IN GENERAL.—Subchapter H of chapter 42 of 

9 the Internal Revenue Code of 1986 is amended by adding 

10 at the end the following new section: 


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1 ‘‘SEC. 4969. EXCISE TAX ON CERTAIN INVESTMENTS OF PRI2 VATE COLLEGES AND UNIVERSITIES. 

3 ‘‘(a) TAX ON ACQUISITION OF LISTED INVEST4 MENTS.—In the case of any specified educational institu5 tion which acquires (directly or indirectly through any 

6 chain of ownership) one or more listed investments during 

7 any taxable year, there is hereby imposed for such taxable 

8 year a tax equal to 50 percent of the fair market values 

9 of such investments determined as of the dates of such 

10 acquisitions. 

11 ‘‘(b) TAX ON NET INCOME FROM 1-YEAR LISTED IN12 VESTMENTS.— 

13 ‘‘(1) IN GENERAL.—There is hereby imposed on 

14 each specified educational institution for the taxable 

15 year a tax equal to 100 percent of the excess (if 

16 any) of— 

17 ‘‘(A) the sum of— 

18 ‘‘(i) all income received with respect 

19 to any 1-year listed investment during such 

20 taxable year, plus 

21 ‘‘(ii) all gains recognized with respect 

22 to the sale or other disposition of any 1- 

23 year listed investments during such taxable 

24 year, over 

25 ‘‘(B) the sum of— 


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1 ‘‘(i) all deductions properly allocable 

2 to income described in subparagraph 

3 (A)(i), plus 

4 ‘‘(ii) all losses recognized with respect 

5 to the sale or other disposition of any 1- 

6 year listed investments during such taxable 

7 year. 

8 ‘‘(2) 1-YEAR LISTED INVESTMENT.—For pur9 poses of this section, with respect to any income re10 ceived or gain or loss recognized, the term ‘1-year 

11 listed investment’ means any listed investment which 

12 was such a listed investment at all times during the 

13 1-year period ending on the date such income was 

14 received or such gain or loss was recognized. 

15 ‘‘(c) LISTED INVESTMENT.—For purposes of this 

16 section— 

17 ‘‘(1) IN GENERAL.—The term ‘listed invest18 ment’ means any specified interest with respect to 

19 any person listed on one or more of— 

20 ‘‘(A) the Entity List maintained by the 

21 Secretary of Commerce, 

22 ‘‘(B) the Military End User (MEU) List 

23 maintained by the Secretary of Commerce, 

24 ‘‘(C) the Unverified List maintained by the 

25 Secretary of Commerce, or 


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1 ‘‘(D) the list maintained by the Federal 

2 Communications Commission of equipment and 

3 services covered by section 2 of the Secure and 

4 Trusted Communications Networks Act of 2019 

5 (commonly referred to as the FCC Covered 

6 List). 

7 ‘‘(2) LISTED PERSONS LIST.—The Secretary 

8 shall establish (not later than 60 days after the date 

9 of the enactment of this section), update, and main10 tain a list of the persons which are listed on one or 

11 more of the lists described in paragraph (1). 

12 ‘‘(3) SPECIFIED INTEREST.—The term ‘speci13 fied interest’ means, with respect to any person— 

14 ‘‘(A) stock or any other equity or profits 

15 interest of such person, 

16 ‘‘(B) debt issued by such person, or 

17 ‘‘(C) any contract or derivative with re18 spect to any interest described in subparagraph 

19 (A) or (B). 

20 ‘‘(4) INCLUSION OF CERTAIN POOLED FUNDS.— 

21 ‘‘(A) IN GENERAL.—Any specified interest 

22 acquired through a regulated investment com23 pany, exchange traded fund, or any other 

24 pooled investment shall not fail to be treated as 


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1 acquired through a chain of ownership de2 scribed in subsection (a). 

3 ‘‘(B) CERTIFICATIONS OF POOLED

4 FUNDS.—The Secretary shall establish proce5 dures under which regulated investment compa6 nies, exchange traded funds, and other pooled 

7 investments may be certified by the Secretary 

8 as not holding any listed investments. 

9 ‘‘(d) SPECIFIED EDUCATIONAL INSTITUTION.—For 

10 purposes of this section— 

11 ‘‘(1) IN GENERAL.—The term ‘specified edu12 cational institution’ means, with respect to any tax13 able year, any eligible educational institution (as de14 fined in section 25A(f)(2))— 

15 ‘‘(A) which is not described in the first 

16 sentence of section 511(a)(2)(B) (relating to 

17 State colleges and universities), and 

18 ‘‘(B) the aggregate fair market value of 

19 the assets of which at the end of the preceding 

20 taxable year (other than those assets which are 

21 used directly in carrying out the institution’s 

22 exempt purpose) is in excess of $1,000,000,000. 

23 ‘‘(2) TREATMENT OF RELATED ORGANIZA24 TIONS.—For purposes of subsections (a) and (b), as25 sets held by any related organization (as defined in 


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1 section 4968(d)(2)) with respect to an educational 

2 institution shall be treated as held by such edu3 cational institution, except that— 

4 ‘‘(A) such assets shall not be taken into 

5 account with respect to more than 1 educational 

6 institution, and 

7 ‘‘(B) unless such organization is controlled 

8 by such institution or is described in section 

9 509(a)(3) with respect to such institution, as10 sets which are not intended or available for the 

11 use or benefit of such educational institution 

12 shall not be taken into account. 

13 ‘‘(e) VALUATION OF DEBT.—For purposes of sub14 section (a), the fair market value of any debt shall be 

15 treated as being the principal amount of such debt. 

16 ‘‘(f) REGULATIONS.—The Secretary may issue such 

17 regulations or other guidance as may be necessary or ap18 propriate to carry out the purposes of this section, includ19 ing regulations or other guidance providing for the proper 

20 application of this section with respect to institutionally 

21 related foundations and pooled investments.’’. 

22 (b) CLERICAL AMENDMENTS.— 

23 (1) The table of sections for subchapter H of 

24 chapter 42 of such Code is amended by adding at 

25 the end the following new item: 


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‘‘Sec. 4969. Excise tax on certain investments of private colleges and universities.’’. 

1 (2) The heading of subchapter H of chapter 42 

2 of such Code (and the item relating to such sub3 chapter in the table of subchapters for such chapter) 

4 are each amended by striking ‘‘Tax Based on In5 vestment Income’’ and inserting ‘‘Taxes 

6 Based on Investments’’. 

7 (c) EFFECTIVE DATES.— 

8 (1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, the amendments made by 

10 this section shall apply to taxable years ending after 

11 the earlier of— 

12 (A) the end of the first calendar year be13 ginning after the date of the enactment of this 

14 Act, or 

15 (B) the end of the 1-year period beginning 

16 on the date on which the Secretary of the 

17 Treasury (or the Secretary’s delegate) estab18 lishes the listed persons list under section 

19 4969(c)(2) of the Internal Revenue Code of 

20 1986 (as added by this section). 

21 (2) CERTAIN PRIOR ACQUISITIONS.—Section 

22 4969(a) of the Internal Revenue Code of 1986 (as 

23 added by this section) shall not apply to investments 


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1 acquired before the end of the calendar year referred 

2 to in paragraph (1)(A). 

3 (3) CERTAIN PRIOR INCOME AND GAINS.—Sec4 tion 4969(b) of the Internal Revenue Code of 1986 

5 (as added by this section) shall not apply to income 

6 received, or gains or losses recognized, before the 

7 end of the 1-year period referred to in paragraph 

8 (1)(B). 

Æ 


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